5 CSULB Students Take 1st Place in Investment Plan Competition and $100,000 to Invest in the Stock Market

Applying skills learned within Cal State Long Beach’s (CSULB) College of Business Administration, a team of 16 students and their investment plan took first place and the opportunity to invest $100,000 in the stock market during a competition sponsored by the Chartered Financial Analysts Society of Orange County (CFAOC).

The “California State University, Long Beach Student Managed Investment Fund Team,” which consists of CSULB undergraduate and graduate students, has competed in the competition for the last six years and has snatched first place from its Orange County-based competitors each time. Though the CFAOC’s Request for Proposals (RFP) each year is intended for Orange County’s colleges and universities, the organization allows CSULB to participate due to its location near the county line.

CSULB’s Richard Runyon, who has been the director of the Student Managed Investment Fund (SMIF) and the students in the competition since 1995, said that the competition generates “significant career prospects” for the teams. He also believes the students gain crucial hands-on experience while managing and investing money for the CFAOC.

“This team put forward such an extraordinary effort in writing a response to the RFP. It was extremely well detailed,” said Runyon, who has been teaching at CSULB since 1968. “Then they delivered an oral presentation to the panel with a very professional demeanor. That made all the difference in their first-place win.”

All the team members are enrolled in the SMIF. This honors-level course within CSULB’s College of Business Administration was created in 1995 to provide its members valuable hands-on, real-world experience in managing an investment portfolio consisting of actual monetary assets, not the “paper” transactions that are used in other courses.

The competition included a variety of questions regarding how the collegiate teams would plan to invest its money. To develop the proposal, the CSULB team split into groups to tackle such questions as, “Who on the team would propose various investments in managing the money?,” “How would they protect the portfolio?” and “What were their investment valuation models?”

In December 2008, all the teams gathered in front of a CFAOC panel to make a 20-minute proposal and answer questions related to their presentations. Five students presented the CSULB investment plan before the four-member panel. They were Rueben Conceicao, Babak Ardarkani, Kristin Tran, Lam Tran and Derek Baldwin.

The team developed an investment plan utilizing what they learned in such under graduate courses as Principles of Investments and Security Analysis-Portfolio Management, or at the graduate level studying in such courses as Seminar in Corporate Finance and Seminar in Investments.

“Our plan was extremely cautious, which turned out to be the right way to go. The market is in a downturn so we recommended investing conservatively,” said Conceicao. “We were very fair and honest in our investment plan and careful not to recommend ideas that could not be delivered in this economy.”

After evaluating all the entries, the judges awarded CSULB the $100,000 grand prize, second place and $35,000 to Cal State Fullerton and third place and $25,000 to the University of California, Irvine.

According to teammate Wayne Brown, the lead copy writer for the team’s investment plan, the CSULB team takes a “holistic” approach to investing, and “continues to monitor the equity markets for the best opportunities.”

“The markets have been rallying lately and our strategy involves constantly reconsidering the macroeconomic and market environments while looking for the securities that are most likely to outperform. The markets have been incredibly challenging during our tenure, experiencing unprecedented levels of volatility and price swings not seen since The Great Depression,” said Brown. “So we continue to manage the SMIF portfolio with a cautious approach, which has served us very well during these turbulent times. I hope and expect that the team responding to next year’s RFP will have much better markets to work with.”

The portfolio is owned by the CFAOC and it will retain all the investment returns generated by the students. Six percent of all the portfolios are set aside each year for college scholarships.

The CFAOC is a non-profit organization that promotes the high professional and ethical standards within the investment community and maintains ongoing educational and certification opportunities. The organization is comprised of more than 134 financial analyst societies worldwide.

Besides managing the portfolio, the students will continue drafting quarterly reports for the CFAOC and will deliver an annual report regarding their successes in the market at the end of 2009.

“We worked hard on our plan to ensure we were the best investment team. We had already taken first place five times in a row and didn’t want to be the first losing team,” said Conceicao, one of the student team members who helped write and present the plan. “This was really about pride, but was also a terrific learning experience. We were representing Cal State Long Beach and wanted to make sure the university remained number one. So we worked often 10 hours a day to make sure we were ready.”